Introduction
Mediation is one of the most popular forms of alternative dispute resolution and has become firmly embedded in the litigation process.
In circumstances where few matters proceed to trial without the parties first attending a mediation, this article takes a fresh look at the ways to get the most out of any mediation.
Purpose
It is important for the parties to be reminded a principal function of mediation is to avoid the considerable time, cost, inconvenience and uncertainty of prolonged litigation and a trial, by enabling the parties to reach a mutually acceptable agreement reflective of the perceived merits and risks of their legal and commercial positions.
As all litigators are aware, the benefits associated with mediation include:
1. There is no ‘loser pays’ rule
In addition to the notoriously high costs of litigation, the expense of a trial is compounded by the general rule:
- costs are awarded in favour of the successful party, adding to the burden of the unsuccessful party;
- even a successful party will not recover all of its costs, with the rule of thumb being an award of standard costs will result in recovery of only about 65% of the costs incurred.
Parties generally bear their own costs of a mediation (but are free to negotiate and agree any apportionment they choose) at a time when those costs are much lower than after a trial.
2. The outcome is certain and final
The eminently qualified and experienced minds of the best solicitors and barristers commonly hold different opinions about the quality of their evidence and issues of law. They are, after all, only opinions.
The difficulty of confidently predicting how a judge will interpret that evidence or construe the law is amply demonstrated by the number of reversals on appeal and dissenting judgments.
A mediated agreement affords certainty and finality without the ongoing uncertainty and risks of litigation, with any variation to the mediated agreement typically requiring the consent of all the parties involved.
Whilst mediated agreements sometimes need to be enforced, so do court judgments.
3. Trials are often a zero-sum game
Court judgments typically afford an advantage for one party at the expense of another and are limited in the relief they can provide.
Mediations on the other hand are more flexible and empower the parties to control the outcome. That affords the possibility of mutually acceptable and commercial solutions that are not available from the courts.
There does not need to be one party that achieves its preferred outcome at the expense of the other. And because the parties collaboratively agree on the resolution, they are generally more satisfied with the outcome.
Mediated settlements are also confidential, unlike published judgments.
4. Delay
One reason for the expense of trial is the necessity for all the relevant evidence to be compiled, which is a lengthy and time consuming process that commonly involves the fees of third party experts in addition to solicitors and barristers.
By contrast, parties are free to mediate at any stage of a dispute and as often as they can agree, including before litigation is commenced and certainly before all the expenses associated with a trial are incurred.
Strategies for Success
Although the obvious measure of success in a mediation is a mutually beneficial resolution, there are steps that can be taken to enhance the likelihood of the best possible outcome and other benefits even if an agreement is not reached.
1. Preparation
Ensure you identify all the relevant documents to be referred to at mediation but don’t waste time on bundles of irrelevant documents.
Identify the documents that support your position and consider how to refer to them during the mediation. Be aware of the documents that undermine your position and how to address them if/when they are raised.
It is often helpful (especially if there are no pleadings) to prepare a position paper to identify the key issues before the mediation, so no one is taken by surprise. Surprises de-rail mediations.
Ensure the necessary decision makers are available and appropriate authorities in place. There is nothing more frustrating than realising a key stakeholder has been overlooked or a necessary approval has not been obtained.
2. The mediator
It is critical the chosen mediator has:
- Relevant knowledge to understand the key issues in dispute;
- Experience in similar disputes;
- An impartial and constructive approach that will assist parties reach an agreement.
3. Listening with an open mind
Actively listening is not only a necessary courtesy but also provides the opportunity to identify underlying interests or perceptions that may not previously have been apparent and to remove any misunderstandings.
Even if a dispute does not resolve at mediation, it affords an invaluable opportunity to learn more about other parties, their and your own case and the perceptions that may be hindering a compromise.
4. Strategy
Identify the main issues to be addressed and avoid becoming side-tracked by debating pointless distractions.
Understand your own and the other party’s interests. Be aware of and reflect on the weaknesses in your own case and have in mind best and worst case scenarios, and what might constitute a satisfactory or acceptable resolution.
It is worth identifying what the ultimate position – including in terms of timing, costs and commercial relationships – will likely be if the matter does not settle.
Conclusion
Mediation is a valuable and effective process for resolving disputes, empowering parties to take control of the outcome. It has many benefits including but not limited to confidentiality, flexibility and saving time and money.
Success in mediation relies on careful preparation, selecting the right mediator, active listening and implementing a strategically planned approach.
By embracing these principles, parties increase their chances of reaching a mutually acceptable agreement that will place them all in a better position than proceeding to trial.
This article may provide CPD/CLE/CIP points through your relevant industry organisation.
The material contained in this publication is in the nature of general comment only, and neither purports nor is intended to be advice on any particular matter. No reader should act on the basis of any matter contained in this publication without considering, and if necessary, taking appropriate professional advice upon their own particular circumstances.
